Reading about the major UK lenders and their apparent push for some of the many industry trade bodies to undergo some sort of merger, tends to reinforce where much of the power lies within our market. In trade body terms it has been something of an industry ‘open secret’ that the larger banks and building societies effectively fund much of the trade body ‘action’ that takes place.
This is not just confined to the lenders’ own trade bodies either but also the adviser and intermediary bodies who secure much of their funding from both lenders and other providers – it is a somewhat sad state of affairs that without such financial backing I’m not so sure we would have the active advisory trade bodies we deserve. Some advisers might disagree and suggest we have exactly the right ones, given the power that is wielded by these big institutions.
It’s difficult to know what will eventually come of the noises coming out regarding the big boys’ view that there are too many trade bodies, but I suspect when you are funding them to the tune of an estimated £50m, you’re probably going to get what you want. While the individual bodies themselves will undoubtedly push back against such ‘M&A’ activity, they are likely to be fighting a losing battle and we can probably all expect a smaller number of trade bodies covering perhaps a far wider range of product areas than we have currently.
The fact is that in most parts of the market, the funding and income trickles down from our lender partners, and therefore it should perhaps be expected that they might wish to cut costs in some areas, or they might wish to have more joined up thinking around their trade body representation. This is not just an issue which is confined to this area but I’m also reminded of the significant action that has been taken in the conveyancing market by lenders in recent times – the culling of their solicitor panels being one prime example as they seek to combat fraud, to deal more with specialists not dabblers, and to ensure that they are not spread too thinly across the piece.
It’s not been the case with all lenders – indeed some have recently expanded their panels – but on the whole the move has been away from dealing with a crowded conveyancing marketplace. This clearly has had repercussions for the conveyancing firms themselves, but also advisers and their clients – especially if they are looking to use firms who may not be available to work on a particular lender’s case.
We’ve talked about this issue before in terms of advisers losing control of their client’s conveyancing needs only to find, some way down the line, that they have gone off and chosen a solicitor which effectively can’t act on their behalf. It’s at this stage that the client could become somewhat annoyed and wonder why their adviser did not look after their conveyancing needs from the get-go. One wonders why advisers would run the risk of a dissatisfied client when it is simple enough to use a distributor, like ourselves, and handle the conveyancing advice and recommendation themselves.
So, even while many in the market have been talking about the re-establishment of the intermediary market as a major force in its own right – which I totally agree with by the way – it’s important to recognise the power that lenders still, and always will, yield. It’s therefore important to develop those strong, symbiotic relationships that will stand advisers in good stead for many years to come.
Harpal Singh is managing director of BrokerConveyancing.co.uk